Financial independence means different things to different people. I appreciate the desire to categorize stages of the journey, but when it ends varies for each person.
For some, like Garrett and Our Next Life, financial independence and early retirement are pretty much the same.
For me, financial independence and early retirement are different. I think of early retirement as largely dependent on passive income sources, maybe a little active income. But financial independence is a different animal — it’s the minimum required for someone to walk away from a situation and embark on a new journey.
For example, I would try to retire early if I had a stressful job and enough money to fund life indefinitely until I figure out what’s next.
I quit my job in favoring of running our first business, so I don’t feel that kind of stress now.
But…and this is a big but…I’m no Pollyanna. We don’t have enough money to fund life indefinitely. If push comes to shove, then I want a safety net to catch us. (Creating a “bare bones budget” was one small step in that direction.)
To me, financial independence means simply having a safety net to cushion future blows, to make the next stage of the journey a little more comfortable. We think of FI as a “kid-friendly amusement park” — just a few bumps to make the ride thrilling.
So that’s what Garrett and I have agreed we’re working toward. We decided that financial independence occurs when our passive income from real estate covers our household expenses, which are around $25,000 annually. This way, if we absolutely had to live off of the income from our real estate, we could make it happen, but we wouldn’t be dependent on that income 100% of the time.
We’re going for cashflow, not the 25x in our retirement accounts. If we managed to save 25x ($625,000) in the next two years, I would be SHOCKED.
Since we won’t be sharing how much we have (or haven’t) saved, this should give you some idea in the future of our financial situation when we make our lifestyle transition. 😉
Being debt free means that we’re able to save much of what we used to apply to our debt. How much we save, what size manufactured home park we’ll invest in, and whether or not we’ll invest in another investor’s fund are TBD. We’ll continue to share as things progress if anyone is interested in this kind of REI.
What are we doing while we save up? Education, education, education…
It all started with an episode of the BiggerPockets Podcast I heard way back in 2015. Jefferson Lilly was SUPER excited about investing in MHPs and now I know why.
It wasn’t long before I was drawn into MHPs, too. Why? Basically, we’re renting dirt. Now, we know it’s not quite that simple, but hey! Nothing in life is simple. Choose your battles. Play through to the end, whatever you choose to do.
Interested in MHPs? Check out these resources that have been invaluable to us.
Mobile Home Park Investors (podcast)
Mobile Home Park Investing (podcast)
We just discovered these resources, so check ’em out, too…
Adventures in Mobile Homes (blog, books)
Mobile Home University (forum, books)
Regardless of your approach and whether or not you focus on financial independence or early retirement, I’d love to hear more about the plans you have to fund your lifestyle.